Boasting warm weather, strong job growth and a relatively low cost of living, it's no wonder why new residents flock to the Tampa metropolitan area year after year. A recent study of Penske moving truck data by CNN Money placed Tampa among the top cities Americans are moving to. Forbes also ranked Tampa fifth on a list of the best cities in which to rent.
Q2 2015 Tampa Rental Market Update
In Q2 2015, Tampa was the seventh-best rental market in the Southeastern U.S. and 29th-best in the country as a whole. Since Q1 2015, Tampa dropped three spots in the Rental Ranking Report's regional rankings for the Southeastern U.S. and 11 spots in the national rankings.
The Tampa rental real estate market is unfortunately far from perfect. Tampa rental prices are increasing at a rate far less than the national average; in Q2 2015, they improved by just 3.97 percent, about 20 percent less than the national average for that metric. The local vacancy rate (8.00 percent) and median age of housing inventory (69 days) were also both significantly worse than their respective averages in Q2 2015, 6.72 percent and 63 days, respectively. Taken together, these statistics indicate that demand for Tampa housing isn't remarkably strong.
Regardless, Tampa rental real estate can still be a lucrative investment. Local property values appreciated by an impressive 9.48 percent year-over-year in Q2 2015, a rate that was the eighth-highest in the U.S. for that metric and 86 percent greater than the national average during that period. The average capitalization rate, a statistic that compares annual rents and property values that is commonly used by investors to gauge the attractiveness of rental properties, was an impressive 7.87 percent for Tampa rental real estate in Q2 2015 - about 15 percent higher than the national average. So, while Tampa is hardly the hottest market in the country, nor even in the Southeastern U.S., it unquestionably offers both current and prospective rental property owners the opportunity to reap significant returns.
Q1 2015 Tampa Rental Market Update
As you can imagine, the rental market in Tampa is booming. With our Q1 2015 Rental Ranking Report finding it to have the fourth-best rental market in the Southwest and the 18th-best market in the entire U.S. in which to invest in rental real estate, there has never been a better time to rent out your personal or investment property.
Tampa scores exceptionally high marks for its low 4.00 percent vacancy rate, the tenth-lowest vacancy rate in the country, that indicates demand for rental housing is quite high there. Rental rates in Tampa have remained roughly even over the last year, but home values have appreciated 8.46 percent in the same time period, well above the national average, while simultaneously generating solid rental yields on investment (judging by the Big Guava's excellent capitalization rate of 8.61 percent) earning Tampa a national rank of 15 for both metrics. This tells us investors can expect a solid rate of return on their investment once the property is rented.
One caveat: the Tampa metropolitan area and Hillsborough county in general are at an elevated risk of sinkhole damage. It's just a geological fact of life in that part of the country. And, of course, it's also prone to the occasional hurricane or tropical storm. You'll want to be sure to secure insurance both for wind and sinkhole damage, on top of your standard landlord insurance or home insurance policy.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the average number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Tampa rental property?
This is an excellent time to invest in Tampa rental real estate. Strong property value appreciation and capitalization rates indicate that investment in Tampa rental real estate can pay off in both the short and long terms.
Thinking about renting out a property in Tampa? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.